Using the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act passed in 2022, President Biden provided computer chip giant Intel with $8.5 billion in Federal grants. Additionally, he authorized the company to receive up to $11 billion more in loans under the act. With this capital, Intel claims it will open manufacturing and research facilities in Arizona, New Mexico, Ohio, and Oregon.
Announced as an effort to move semiconductor manufacturing to the US, Biden fails to understand the simple economics of the measure. Intel and other companies have been producing semiconductors in China and Taiwan for decades simply because they can undercut other nations on labor. Already set up with ample factory workers and locations, moving to the US would be incredibly expensive. While expanding by adding locations eliminates some of those problems, it doesn’t solve the problems here in the US.
Intel and other manufacturers of computer-related items have a propensity to hire outside help who will work for slave wages. As Biden is already flooding the southern border with illegals who need jobs, Intel should have no problem finding subsidized workers in these states. Given the fact that two of the states they chose are already on the border, and one is in the middle of NYC and Chicago, the workforce is already being brought in thanks to “sanctuary cities.”
In the meantime, Intel gets the money, and if they want to pull the plug on the whole deal, the grants won’t disappear.
A once legendary chip manufacturer, Nvidia has left them in the dust in terms of revenue and the development of AI-based chips. In the CPT and AMD chip market for smartphones, Qualcomm has also raced ahead of Intel in terms of revenue. Even Taiwan Semiconductor Manufacturing Company (TSMC) has forced Intel further down the trough in semiconductor manufacturing. Using this as the justification behind the grants, Biden claims this will return the work to the US and prosperity to an American company choked out by foreign competition.
